On July 30, 2025, the Trump Administration released one of the most comprehensive federal policy documents on digital assets to date. The President’s Working Group on Digital Asset Markets, established by Executive Order 14178, delivered a 166-page report titled Strengthening American Leadership in Digital Financial Technology outlining a roadmap to make the United States the global leader in digital financial technology. The report frames this effort as nothing less than the start of a “Golden Age of Crypto.”
For the digital asset industry, this blueprint has far-reaching implications. It addresses not only how markets should be structured, but also how banks can re-engage with digital assets, how stablecoins can reinforce the strength of the U.S. dollar, how illicit finance can be better investigated and prosecuted, and how taxation should evolve to reflect the unique nature of tokens and decentralized finance.
For Merkle Science’s community of law enforcement, regulators, financial institutions, token issuers, exchanges, wallets, and DeFi protocols, the report is especially important. It signals how federal agencies plan to reshape oversight and enforcement in ways that directly affect how digital assets are monitored, traced, and integrated into the wider financial system.
In this article, we will break down the key recommendations of Executive Order 14178, explain how they are designed to usher in a “Golden Age of Crypto,” and analyze what they mean for regulators, law enforcement, stablecoin issuers, financial institutions, and the wider digital asset ecosystem. Readers will gain a clear understanding of the policy changes ahead and how tools like Merkle Science’s Compass and Tracker can support compliance, monitoring, and investigations in this new regulatory landscape.
The PWG’s central vision is to build a fit-for-purpose market structure that fosters innovation while protecting consumers and markets. The report acknowledges that, for years, the lack of clarity and the use of enforcement actions instead of rulemaking pushed innovation offshore. The new approach seeks to bring that innovation back to the U.S. by offering legal certainty, predictable regulation, and respect for individual rights such as self-custody.
Retail adoption already signals why this clarity matters. More than one in five Americans reportedly hold digital assets, and venture capital funding into crypto start-ups surged in 2025. Institutional adoption has also accelerated, particularly after the SEC approved spot Bitcoin exchange-traded funds, allowing pension funds and registered advisers to allocate directly. The sheer scale of activity underscores that this is no longer a niche experiment but a mainstream financial ecosystem.
At its core, the “Golden Age of Crypto” is about balancing two imperatives: growth and trust. Policymakers want to make U.S. markets the deepest and most liquid in the world, while also protecting investors, ensuring transparency, and guarding against illicit finance.
One of the central recommendations is for Congress to pass the CLARITY Act. This legislation would formalize the division of responsibilities between the SEC and CFTC, eliminating duplicative oversight and giving the CFTC explicit authority over spot markets for non-security digital assets. This would end years of jurisdictional disputes and give exchanges and issuers greater certainty about which regulator applies.
The SEC and CFTC are also urged to use their existing powers to enable trading of digital assets at the federal level. Instead of relying on fragmented state regimes or leaving projects in limbo, the agencies could provide exemptions, safe harbors, and sandbox environments where new products can be tested. For token issuers, this would create a path to launch networks while decentralization is still in progress. For exchanges, it would mean clearer rules on custody, broker-dealer obligations, and recordkeeping.
This vision matters not only for compliance officers and lawyers, but also for investigators. A predictable regulatory environment allows law enforcement to know which entities are registered, which rules apply, and where to direct investigative requests. With Compass, Merkle Science already supports platforms in aligning with evolving AML frameworks. As new federal rules emerge, tools like Compass will help exchanges, custodians, and dApps stay ahead of compliance requirements while providing regulators and investigators the transparency they need.
A second pillar of the report is modernizing how banks interact with the digital asset industry. Under the previous administration, many crypto businesses were cut off from banking services in what became known as “Operation Choke Point 2.0.” Internal documents revealed that supervisors often pressured banks to pause or halt services to crypto firms, regardless of their legality or risk management practices.
Executive Order 14178 reversed this approach. The FDIC, Federal Reserve, and OCC have now clarified that banks are free to custody digital assets, issue tokenized instruments, and support stablecoin activity as long as safety and soundness standards are met. The withdrawal of Staff Accounting Bulletin 121, which had made custody nearly impossible for publicly traded banks, also removed a major obstacle.
The report urges regulators to go further by increasing transparency around how charters and Reserve Bank master accounts are approved. It also calls for risk-based capital rules, so that exposures to digital assets are treated according to actual volatility and liquidity rather than being automatically penalized. This opens the door for banks to launch custody products, integrate blockchain into payments, and compete with fintechs in the digital asset space.
For financial institutions, the signal is clear: digital assets are no longer off-limits. The opportunity now lies in building compliant, risk-adjusted services.
Perhaps the most significant legislative milestone so far has been the passage of the GENIUS Act, which establishes the first federal framework for payment stablecoins. Issuers will need to maintain high-quality liquid reserves, provide redemption rights, and submit to federal oversight. Unlike unregulated offshore stablecoins, U.S.-issued dollar-backed stablecoins would operate under a banking-style framework.
The report also takes a strong stance against central bank digital currencies. By urging Congress to pass the Anti-CBDC Surveillance State Act, the administration seeks to ensure that the U.S. does not issue a CBDC that could enable surveillance or undermine privacy. Instead, the focus is on private sector stablecoins as the future of payments.
For issuers, this means preparing for bank-like supervision and compliance. For financial institutions, it means that stablecoin-based payment systems could soon become mainstream. And for regulators, it ensures that dollar-backed tokens reinforce, rather than challenge, the sovereignty of the U.S. dollar in global markets.
One of the most detailed sections of the report is its chapter on illicit finance. Policymakers acknowledge that digital assets present both opportunities and challenges. While blockchains offer unprecedented transparency, they also provide criminals with tools for cross-border transfers, pseudonymous accounts, and novel obfuscation methods.
The report calls for an overhaul of Bank Secrecy Act (BSA) obligations. Treasury and regulators are urged to update outdated guidance, clarify obligations for DeFi protocols, and draw a clear line between entities that control assets and those that simply provide software. Exchanges, custodians, and service providers would fall squarely under AML rules, while open-source developers would not.
Equally important is the reinforcement of self-custody rights. Congress is encouraged to codify that individuals have the right to hold their own private keys. Any attempt to restrict wallet usage, the report warns, could drive activity underground and make it harder to investigate illicit flows.
The Working Group also stresses the need to prevent misuse of enforcement powers. Just as banks were debanked under Operation Choke Point, there is concern that AML rules could be stretched to exclude lawful businesses. Transparency and proportionality are emphasized as safeguards.
Finally, the report prioritizes financial privacy. It cautions against surveillance-heavy approaches and instead recommends exploring privacy-preserving compliance technologies such as zero-knowledge proofs.
For law enforcement, these recommendations mean both new challenges and new opportunities. Investigators will be asked to respect privacy while still developing capacity to track illicit finance. This is precisely where Merkle Science’s Tracker provides value. Tracker enables agencies to follow funds across chains, identify high-risk addresses, and generate evidence suitable for prosecution — all while distinguishing between illicit activity and legitimate self-custody.
The tax system is another area in need of modernization. Currently, the IRS treats virtual currencies as property, meaning every transaction can trigger capital gains. The report urges Congress to create a new asset class for fungible digital assets, aligning them with securities and commodities where appropriate.
Treasury and the IRS are encouraged to issue guidance on emerging issues such as wrapped tokens, staking income, and de minimis exemptions for small purchases. Without such clarity, both individuals and businesses face significant compliance burdens.
Clearer tax rules will not only reduce uncertainty but also make it easier for investigators to pursue tax evasion cases involving digital assets.
For law enforcement and regulators:
The recommendations provide clearer jurisdictional boundaries and emphasize international cooperation. Updated SAR typologies and modernized BSA rules will help investigators target bad actors while respecting privacy.
For token issuers and stablecoin providers:
Federal licensing under the GENIUS Act will require strong reserve management, compliance frameworks, and transparent governance. Safe harbors for token launches could allow innovation without immediate enforcement risks.
For exchanges, wallets, and dApps:
Federal pre-emption could simplify compliance by replacing fragmented state regimes. Custodial services will face direct oversight, while non-custodial software providers may avoid unnecessary regulation.
For financial institutions:
The end of Operation Choke Point 2.0 and the alignment of capital rules create opportunities to re-engage with digital assets. Banks can expand custody, tokenization, and blockchain-based payments under a clear framework.
Opportunities for Public-Private Collaboration
The PWG emphasizes that government cannot act alone. Public-private collaboration is critical for effective oversight. This includes intelligence sharing between law enforcement and exchanges, partnerships to test compliance solutions in sandboxes, and continued dialogue between regulators and innovators.
Merkle Science plays a key role in this ecosystem. Compass helps institutions build compliance frameworks that adapt to evolving regulation, while Tracker equips investigators with the ability to trace complex illicit flows. Together, these tools enable stakeholders to meet the dual challenge at the heart of EO 14178: encouraging innovation while safeguarding security.
The recommendations under Executive Order 14178 represent the most ambitious U.S. policy blueprint for digital assets to date. By combining pro-innovation policies with robust enforcement strategies, the U.S. aims to lead the world into a new era of digital finance.
For Merkle Science’s audience, the message is clear. The U.S. market is on the verge of becoming more structured, more predictable, and more innovation-friendly. Law enforcement will gain new tools, financial institutions will re-enter the market, and token issuers will have a defined path to compliance.
Most importantly, the report signals that the future of digital assets in the U.S. will be shaped not only by regulation but also by collaboration between government, industry, and technology providers. As stakeholders prepare for this “Golden Age of Crypto,” Merkle Science’s Compass and Tracker will remain essential tools for navigating compliance, protecting markets, and investigating crime in the digital asset era.
